Berman exits as Par divides

CEO Grey splits studio into 4 labels; chiefs report to him

Gail Berman stepped down Wednesday as the president of Paramount Pictures, the first step in chairman and CEO Brad Grey's restructuring of the studio into four distinct labels.

Co-president of production Allison Shearmur also will step down, effective immediately, Grey said.

Without a studio president, under the new Paramount structure each of Grey's motion picture group executives now reports directly to him.

The four labels are DreamWorks, headed by co-chairman Stacey Snider, who already reports to Grey; MTV Films/ Nickelodeon Movies, led by president Scott Aversano; Paramount Pictures, run by president of production Brad Weston; and Paramount Vantage, headed by president John Lesher.

DreamWorks will supply eight pictures a year for the studio. MTV/Nick and Paramount will deliver four each, while Lesher already has 10 modestly budgeted pictures scheduled for release in 2007.

In making the changes, Grey is hoping to clarify and reorganize a studio that many industry insiders found chaotic and internally fractious, with executives vying for position. Grey is simplifying things by awarding Weston sole responsibility for running production, a job he had shared with Shearmur.

"The new structure provides a real clarity to our system," Grey said in a telephone interview. "The label strategy not only allows us to target our development more effectively but to use the assets we've been building during the turnaround in the best way for the slate, the staff and the community we deal with every day."

With Berman and Shearmur's departures, a studio that had boasted many female executives during Sherry Lansing's tenure is now run by men. Grey replaced MTV Films' Julia Pfister with Aversano in August and Paramount Classics' Ruth Vitale with Lesher in November 2005.

Berman was the only female executive ever to hold the top posts at both a major film studio and television network. She was president of entertainment at the Fox Broadcasting Co. for five years, then joined Paramount in May 2005 at Grey's behest. With expertise primarily as a TV series producer and network programmer, Berman experienced a rocky transition as she moved into the motion picture arena.

Although she had a hand in a number of films, including "Nacho Libre" and "World Trade Center," that marked the beginning of a turnaround at Paramount in the summer, her tenure has been marked by uncertainty. Rumors periodically resurfaced that Berman would leave the job, which became more tenuous following Viacom chief Tom Freston's ouster in September. Shearmur also was the subject of rumors forecasting her exit.

While she played an active role in setting up an overall deal with producer-director J.J. Abrams after he directed "Mission: Impossible III" so that he could reinvigorate the "Star Trek" franchise, she never gained solid footing in Hollywood. Berman pushed forward "Freedom Writers," which looks like an early 2007 boxoffice single, and Mark Waters' FX extravaganza "The Spiderwick Chronicles," set for February 2008 release.

Stacey Sher and Michael Shamberg, who produced "World Trade Center" and "Freedom Writers," said they enjoyed their experience working with Berman at the studio. "She is a great collaborator and a talented executive," they said.

Many industry observers paint a picture of a studio in constant transition. Paramount was beset with a number of seismic shifts, including the split of Viacom into the corporate entities CBS and Viacom, the purchase of DreamWorks SKG and Viacom chairman Sumner Redstone's unexpected firing of Freston. It was Freston who had replaced former Paramount chiefs Jonathan Dolgen and Lansing with Grey in March 2005, with a mandate to reinvent Paramount from the ground up.

Agents and producers paint a portrait of a series of executives ? including Freston, Grey and Berman ? with little experience in the intricacies of packaging big-budget studio vehicles in Hollywood.

As Paramount president, Berman started off supervising an annual slate of 16 films. Her team, led by Weston and Shearmur, threw out much of what was in development and was slow to gear up new production. She was assailed in the press for her imperious manner and lack of movie experience. Berman had admitted that she had much to learn: "I underestimated the challenge," she said in an interview late last year. "I had to adjust to the new business."

As soon as Paramount acquired DreamWorks, Berman's slate was cut in half. And when Grey brought in Rob Moore to run Paramount's digital, business affairs and worldwide distribution and marketing divisions, Berman's job shrank even further. As an outsider learning the ropes, Berman earned respect from the community but never took hold as an aggressive packager of movies. When ex-agent Lesher arrived on the lot and almost instantly, it seemed, delivered a full slate of A-list movies, it didn't make Berman look any stronger, Hollywood insiders said.

Although Grey had hoped that a smaller purview would make Berman's assimilation easier, it proved the opposite, sources said. Her job became too small.

"She didn't really have a job," one UTA agent said. "She didn't do day-to-day development. That was Brad Weston. And she didn't have authority to greenlight movies. That was Brad Grey. It was always an awkward and uncomfortable fit."

Berman focused her attention on developing a diverse lineup of modest-scale movies including Kimberly Peirce's sophomore effort "Stop-Loss," starring Ryan Phillippe, and producer Judd Apatow's $40 million comedy "Drillbit Taylor," starring Owen Wilson. But pushing through supersized tentpole projects proved more challenging. Most of the studio's tentpoles are co-productions, including DreamWorks' $150 million "Transformers" and Warner Bros. Pictures' serial-killer thriller "Zodiac," starring Jake Gyllenhaal, and the $150 million high-tech "Beowulf," directed by Robert Zemeckis.

According to one Paramount producer, Berman was "really strong and tough. She had two strikes: She came out of TV, and she's a woman."

Said Grey: "Gail's dedication in the last 18 months has been invaluable during this important and historic time at Paramount. We respect and appreciate her contributions in reshaping the direction of Paramount Pictures."

Berman said: "From my days on Broadway to my time at Regency Television and Fox and then Paramount, my passion has always been creating exciting entertainment. I'm grateful to Brad Grey for the chance to help bring great films to life and look forward to new professional opportunities ahead."

Nicole Sperling contributed to this report.
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